Exhibit
4.2


 


THIRD AMENDED


 


CERTIFICATE OF DESIGNATION OF


 


SERIES B SENIOR CONVERTIBLE PREFERRED STOCK


 


OF


 


GEOKINETICS INC.


 


PURSUANT TO SECTION 151(g) OF THE


 


GENERAL CORPORATION LAW OF THE STATE OF DELAWARE


 


Geokinetics Inc (the “Corporation”),
a corporation organized and existing under the laws of the State of Delaware,
hereby certifies that:


 


ONE:      The Certificate of
Designation of Series B Senior Convertible Preferred Stock of the
Corporation was filed with the Secretary of State of the State of Delaware on September 8,
2006.


 


TWO:    The Certificate of
Designation of Series B Senior Convertible Preferred Stock of the
Corporation was amended by that certain Amended Certificate of Designation of Series B
Senior Convertible Preferred Stock of the Corporation, filed with the Secretary
of State of the State of Delaware on July 28, 2008 and which provided
that: (i) the Series B Senior Convertible Preferred Stock of the
Corporation be designated Series B-1 Senior Convertible Preferred Stock
(the “Series B-1 Preferred Stock”) and (ii) a new series of
preferred stock of the Corporation, par value $10.00 per share, be created out
of the authorized but unissued shares of capital stock of the Corporation and
be authorized to be issued, with such series to be designated Series B-2
Senior Convertible Preferred Stock (the “Series B-2 Preferred Stock”),
and consist of 350,000 shares, par value $10.00 per share, of which the powers,
preferences and relative, participating, optional and other rights, and the
qualifications, limitations, and restrictions of the Series B-1 Preferred
Stock and the Series B-2 Preferred Stock (collectively, (the “Series B
Preferred Stock”), shall be, in addition to those set forth in the
Corporation’s Certificate of Incorporation, all in accordance with the
provisions of Section 151(g) of the General Corporation Law of the
State of Delaware, as set forth therein.


 


THREE: The Certificate of
Designation of Series B Senior Convertible Preferred Stock of the
Corporation was further amended by the Second Amended Certificate of
Designation of Series B Senior Convertible Preferred Stock of the
Corporation, filed with the Secretary of State of the State of Delaware on February 23,
2009.


 


FOUR:   Pursuant to the authority
expressly granted to and vested in the Board of Directors of the Corporation by
Article FOURTH of the Corporation’s Certificate of Incorporation (the “Certificate
of Incorporation”), the Board of Directors for the Corporation, at a
meeting duly and properly called and held December 2, 2009, duly adopted a
resolution


 

















 


providing that the Second
Amended Certificate of Designation of Series B Senior Convertible
Preferred Stock of the Corporation be amended in its entirety, as follows:


 


FIVE:      The shares of Preferred
Stock previously designated “Series B-1 Preferred Stock” shall for all
purposes of this Third Amended Certificate of Series B Convertible
Preferred Stock of the Corporation shall be renamed and designated “Series B
Preferred Stock.”


 


SIX:        The share of Preferred Stock
previously designated “Series B-2 Preferred Stock” shall be cancelled.


 


(1)           Series B Preferred Stock.


 


(a)           Dividends.


 


(i)            The holders of Series B Preferred
Stock, prior and in preference to any declaration or payment of any dividend on
any class or series of capital stock of this Corporation, shall be entitled to
receive cumulative dividends at the applicable Dividend Rate (as defined
below).  For purposes of this Section 1(a)(i),
“Dividend Rate” shall mean 9.75% per annum, compounded quarterly, of the
Original Issue Price (defined in Section 1(b)(i) below) for each
share of Series B Preferred Stock. 
At the option of the Corporation, all or any portion of dividends
payable on shares of Series B Preferred Stock on any quarterly dividend
payment date through and including October 31, 2011 may be paid in
additional shares of Series B Stock, instead of cash.  The value of each share of Series B
Preferred Stock paid in lieu of cash shall be equal to the Original Issue
Price.  After October 31, 2011, all
dividends shall be paid in cash when, and if declared. All unpaid dividends on Series B
Preferred Stock shall be cumulative and shall accrue, compounding quarterly,
regardless of whether or not the Corporation shall have funds legally available
for the payment of such dividends.


 


(ii)           After payment of the dividends provided
for in Section 1(a)(i), any additional dividends or distributions shall be
distributed among all holders of Common Stock and, Series B Preferred
Stock, and other preferred securities which are convertible into shares of
Common Stock, in proportion to the number of shares of Common Stock that would
be held by each such holder if all shares of Series B Preferred Stock and
other preferred securities were converted to Common Stock at the then-effective
conversion rate.


 


(b)           Liquidation Preference.


 


(i)            The holders of Series B Preferred
Stock, in the event of any Liquidation Event (as defined below), either
voluntary or involuntary, shall be entitled to receive, prior and in preference
to the distribution of any proceeds of such Liquidation Event (the “Proceeds”)
to the holders of Common Stock and other preferred securities (but pari passu to any holder of Series C Preferred Stock),
an amount per share (the “Liquidation Preference Amount”) equal to (A) the
sum of the Original Issue Price (as defined below) for the Series B
Preferred Stock, plus (B) any accrued but unpaid dividends, which have
been accrued to the date of payment. In case the net assets of the Corporation
legally available therefor are insufficient to permit the payment upon all
outstanding shares of Series B Preferred Stock of the full preferential
amount to which the holders of such shares are entitled, then such net assets
shall be distributed ratably upon outstanding shares of Series B Preferred
Stock in proportion to the full


 


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preferential amount to which each such share is
entitled. For purposes hereof, “Original Issue Price” shall mean $250.00
per share for each share of Series B Preferred Stock (as adjusted for any
stock splits, stock dividends, combinations, subdivisions, recapitalizations or
the like with respect to the Series B Preferred Stock).


 


(ii)           After the payment of the Liquidation
Preference Amount with respect to each share of Series B Preferred Stock,
the holders of Series B Preferred Stock will have the right following a
Liquidation Event to receive an additional distribution for each share of Series B
Preferred Stock equal to the excess, if any, of (i) the aggregate amount
distributable with respect to each share of Common Stock following the
Liquidation Event multiplied times the number of shares of Common Stock into
which each share of Series B Preferred Stock is convertible at the
Conversion Rate effective at the time of the Liquidation Event over (ii) the
Liquidation Preference Amount.  As a
result, the total amount distributed with respect to each share of Series B
Preferred Stock following a Liquidation Event will be not less than the amount
determined as if all shares of Series B Preferred Stock had been converted
to Common Stock at the conversion rate applicable at the time of the
Liquidation Event.  In view of this
additional distribution right, the Corporation and the holders of the Series B
Preferred Stock expect that the Series B Preferred Stock will not be
treated as “preferred stock” for federal income tax purposes under Treasury
Regulation § 1.305-5(a).


 


(iii)          For
purposes of this Section 1(b), a “Liquidation Event” shall include (A) the
sale, transfer or other disposition of all or substantially all of the
Corporation’s assets, (B) the merger or consolidation of the Corporation
with or into another entity (except a merger or consolidation in which the
holders of capital stock of the Corporation immediately prior to such merger or
consolidation continue to hold at least 50% of the voting power of the capital
stock of the Corporation or the surviving or acquiring entity following such
merger or consolidation), (C) the transfer (whether by merger,
consolidation, exchange, reorganization or otherwise), in one transaction or a
series of related transactions, to a person or group of affiliated persons
(other than Avista Capital Partners, L.P. and its affiliates), of the
Corporation’s equity securities if, after such transfer, such person or group
of affiliated persons would hold 50% or more of the outstanding voting stock of
the Corporation (or the surviving or acquiring entity) or (D) a
liquidation, dissolution or winding up of the Corporation; provided, however,
that a transaction shall not constitute a Liquidation Event if its sole purpose
is to change the state of the Corporation’s incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held the Corporation’s securities immediately prior to such
transaction. The treatment of any particular transaction or series of related
transactions as a Liquidation Event hereunder may be waived by the vote or
written consent of the holders of a majority of the outstanding Series B
Preferred Stock (voting on an as converted basis).


 


(iv)          In any Liquidation Event, if Proceeds
received by the Corporation or its stockholders are other than cash, their
value will be deemed their fair market value. The determination of such fair
market value shall be made by the Board of Directors of the Corporation or as
otherwise may be set forth in the definitive agreements governing such
Liquidation Event.


 


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(c)           Redemption Rights.


 


(i)            If, at any time after March 31,
2014, the holders of not less than a majority of the shares of Series Preferred
Stock then outstanding deliver written notice to the Corporation of such
holders’ desire to have the Series B Preferred Stock redeemed, all
outstanding shares of Series B Preferred Stock, if not previously
converted pursuant to Section 1(d), shall be redeemed by the Corporation
on a date which is not more than 90 days after the date on which such written
notice was given to the Corporation by the holders of the Series B
Preferred Stock.  Each share of Series B
Preferred Stock to be redeemed hereunder shall be redeemed by payment by the
Corporation in cash of the Redemption Price (as defined below). For purposes
hereof, the term “Redemption Price” shall mean, with respect to each
share of Series B Preferred Stock, an amount equal to the Liquidation
Preference Amount.


 


(ii)           Any redemption pursuant to Sections 1(c)(i) above
shall be preceded by written notice from the Corporation to each holder of Series B
Preferred Stock stating the date fixed for redemption, the Redemption Price and
the place at which holders of Series B Preferred Stock may obtain payment
of the Redemption Price upon surrender of their respective stock certificates.


 


(iii)          All
shares of Series B Preferred Stock redeemed, otherwise acquired or
returned (as a result of conversion or otherwise) by the Corporation shall
immediately be canceled and shall not be reissued.


 


(d)           Conversion. The holders of the Series B Preferred Stock
shall have conversion rights as follows (the “Conversion Rights”):


 


(i)            Right to Convert. Each share of Series B Preferred
Stock shall be convertible, at the option of the holder thereof, at any time
after the date of issuance of such share, at the office of the Corporation or
any transfer agent for such stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing the
Liquidation Preference Amount for the Series B Preferred Stock by the
applicable Conversion Price (as defined below) for the Series B Preferred
Stock (the conversion rate for Series B Preferred Stock into Common Stock
is referred to herein as the “Conversion Rate”), determined as hereafter
provided, in effect on the date the certificate is surrendered for conversion.
The “Conversion Price” per share for Series B Preferred Stock shall
be $17.44 (which amount takes into account the 1-for-10 stock split of the
Corporation effective as of November 3, 2006); provided, however, that the
Conversion Price for the Series B Preferred Stock shall be subject to
adjustment as set forth in subsection 1(e)(iv).


 


(ii)           Corporation Conversion Election. At the election of the Corporation,
each share of Series B Preferred Stock shall be converted into shares of
Common Stock at the Conversion Rate at the time in effect for Series B
Preferred Stock immediately upon the Corporation’s sale of its Common Stock in
an underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the “Securities Act”),
covering the offer and sale of Common Stock (A) at an offering price per
share of not less than $35.00 (as adjusted for any stock splits, stock
dividends, combinations, subdivisions or the like), (B) which results in
net proceeds to the Corporation and the selling stockholders, if any, of not
less than $75,000,000, and (C) after which the Common Stock is listed on
the NYSE, AMEX or the NASDAQ National Market (a “Qualified Public Offering”).


 


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(iii)          Mechanics
of Conversion.
Before any holder of Series B Preferred Stock shall be entitled to
voluntarily convert the same into shares of Common Stock, such holder shall
surrender the certificate or certificates therefore, duly endorsed, at the
office of the Corporation or of any transfer agent for the Series B
Preferred Stock, and shall give written notice to the Corporation at its
principal corporate office, of the election to convert the same and shall state
therein the name or names in which the certificate or certificates for shares
of Common Stock are to be issued. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series B
Preferred Stock, or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder
shall be entitled as aforesaid. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of such surrender
of the shares of Series B Preferred Stock to be converted, and the person
or persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock as of such date. If the conversion is in connection
with an underwritten offering of securities registered pursuant to the
Securities Act of 1933, as amended, the conversion may, at the option of any
holder tendering Series B Preferred Stock for conversion, be conditioned
upon the closing with the underwriters of the sale of securities pursuant to
such offering, in which event the persons entitled to receive the Common Stock
upon conversion of the Series B Preferred Stock shall not be deemed to
have converted such Series B Preferred Stock until immediately prior to
the closing of such sale of securities. If the conversion is in connection with
automatic conversion provisions of subsection 1(d)(ii) above, such
conversion shall be deemed to have been made on the conversion date described
in the stockholder consent approving such conversion, and the persons entitled
to receive shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holders of such shares of Common Stock
as of such date.


 


(iv)          Conversion Price Adjustments of Series B
Preferred Stock for Certain Dilutive Issuances, Splits and Combinations. The Conversion Price of the Series B
Preferred Stock shall be subject to adjustment from time to time as follows:


 


(A)          Conversion Price Adjustments.


 


1.     If the Corporation shall issue, on or
after the date upon which this Third Amended Certificate of Designation is
accepted for filing by the Secretary of State of the State of Delaware (the “Filing
Date”), any Additional Stock (as defined below) for a consideration per
share less than the Conversion Price applicable to the Series B Preferred
Stock in effect immediately prior to the issuance of such Additional Stock, and
if the aggregate dollar amount of (A) all previous issuances of Additional
Stock since the Filing Date and (B) all issuances of Additional Stock as
consideration in the Acquisition or pursuant to the Public Offering, as such
terms are defined in that certain Amended and Exchange Agreement dated December 2,
2009, by and among the Corporation, Avista Capital Partners, L.P., Avista
Capital Partners (Offshore), L.P. and Levant America S.A., is less than
$50,000,000 (determined by aggregating all issuances of Additional Stock made
after the Filing Date and as consideration in the Acquisition or pursuant to
the Public Offering) the Conversion Price for the Series B Preferred Stock
in effect immediately prior to each such issuance shall forthwith be adjusted
to a price equal to the per share consideration paid or given for such Additional
Stock; provided, however, if the Corporation shall issue, on or
after the Filing


 


5
















 


Date, any
Additional Stock after the aggregate amount of previous issuances made after
the Filing Date are in excess of $50,000,000 (determined by aggregating all
previous issuances of Additional Stock made after the Filing Date and as
consideration in the Acquisition or pursuant to the Public Offering) for a
consideration per share less than the Conversion Price applicable to the Series B
Preferred Stock in effect immediately prior to the issuance of such Additional
Stock, the Conversion Price for the Series B Preferred Stock in effect
immediately prior to each such issuance shall forthwith be adjusted to a price
determined by multiplying such Conversion Price by a fraction, the numerator of
which shall be the number of shares of Common Stock Outstanding (as defined
below) immediately prior to such issuance plus the number of shares of Common
Stock that the aggregate consideration received by the Corporation for such
issuance would purchase at such Conversion Price; and the denominator of which
shall be the number of shares of Common Stock Outstanding (as defined below)
immediately prior to such issuance plus the number of shares of such Additional
Stock.  For purposes of this Section 1(d)(iv)(A),
the term “Common Stock Outstanding” shall mean and include the
following: (1) outstanding Common Stock, (2) Common Stock issuable
upon exercise of outstanding stock options, (3) Common Stock issuable upon
exercise of outstanding warrants to purchase Common Stock, (4) Common
Stock issuable upon conversion of the Series B Preferred Stock, and (5) Common
Stock issuable upon the conversion of any other series or class of equity
securities issued after the date hereof which is convertible into shares of
Common Stock.  Shares described in (1) through
(3) above shall be included whether vested or unvested, whether contingent
or non-contingent and whether exercisable or not yet exercisable.


 


2.     Notwithstanding anything to the contrary
set forth in this Certificate of Designation, no adjustment of the Conversion
Price for the Series B Preferred Stock shall be made in respect of
issuances of Additional Stock as consideration in the Acquisition.


 


3.     No adjustment of the Conversion Price for
the Series B Preferred Stock shall be made in an amount less than one cent
per share, provided that any adjustments that are not required to be made by
reason of this sentence shall be carried forward and shall be either taken into
account in any subsequent adjustment made prior to three (3) years from
the date of the event giving rise to the adjustment being carried forward, or
shall be made at the end of three (3) years from the date of the event
giving rise to the adjustment being carried forward. Except to the limited
extent provided for in subsections 1(d)(iv)(A)(5)(c) and (5)(d), no adjustment
of such Conversion Price pursuant to this subsection 1(d)(iv) shall have
the effect of increasing the Conversion Price above the Conversion Price in
effect immediately prior to such adjustment.


 


4.     In the case of the issuance of Additional
Stock for cash, the consideration shall be deemed to be the amount of cash paid
therefore before deducting any reasonable discounts, commission or other
expenses allowed, paid or incurred by this corporation for any underwriting or
otherwise in connection with the issuance and sale thereof.


 


5.     In the case of the issuance of the
Additional Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market thereof as
determined by the Board of Directors irrespective of any accounting treatment.


 


6

















 


6.     In the case of the issuance of options to
purchase or rights to subscribe for Common Stock, securities by their terms
convertible into or exchangeable for Common Stock or options to purchase or
rights to subscribe for such convertible or exchangeable securities, the
following provisions shall apply for purposes of determining the number of
shares of Additional Stock issued and the consideration paid therefor:


 


a.             The aggregate maximum number of shares of
Common Stock deliverable upon exercise (assuming the satisfaction of any
conditions to exercisability, including without limitation, the passage of
time, but without taking into account potential antidilution adjustments) of
such options to purchase or rights to subscribe for Common Stock shall be
deemed to have been issued at the time such options or rights were issued and
for a consideration equal to the consideration (determined in the manner
provided in subsections 1(d)(iv)(A)(3) and (d)(iv)(A)(4)), if any,
received by the Corporation upon the issuance of such options or rights plus
the minimum exercise price provided in such options or rights (without taking
into account potential antidilution adjustments) for the Common Stock covered
thereby.


 


b.             The aggregate maximum number of shares of
Common Stock deliverable upon conversion or, or in exchange (assuming the
satisfaction of any conditions to convertibility or exchangeability, including,
without limitation, the passage of time, but without taking into account
potential antidilution adjustments) for, any such convertible or exchangeable
securities or upon the exercise of options to purchase or rights to subscribe
for such convertible or exchangeable securities and subsequent conversion or
exchange thereof shall be deemed to have been issued at the time such
securities were issued or such options or rights were issued and for a
consideration equal to the consideration, if any, received by the Corporation for
any such securities and related options or rights (excluding any cash received
on account of accrued interest or accrued dividends), plus the minimum
additional consideration, if any, to be received by the Corporation (without
taking into account potential antidilution adjustments) upon the conversion or
exchange of such securities or the exercise of any related options or rights
(the consideration in each case to be determined in the manner provided in
subsections 1(d)(iv)(A)(3) and 1(d)(iv)(A)(4).


 


c.             In the event of any change in the number
of shares of Common Stock deliverable or in the consideration payable to the
Corporation upon exercise of such options or rights or upon conversion of or in
exchange for such convertible or exchangeable shares, the Conversion Price of
the Series B Preferred Stock, to the extent in any way affected by or
computed using such options, rights or securities, shall be recomputed to
reflect such change, but no further adjustment shall be made for the actual
issuance of Common Stock or any payment of such consideration upon the exercise
of any such options or rights or the conversion or exchange of such securities.


 


d.             The number of shares of Additional Stock
deemed issued and the consideration deemed paid therefor pursuant to subsections
1(d)(iv)(A)(5)(a) and (b) shall be appropriately adjusted to reflect
any change, termination or expiration of the type described in either
subsection 1(d)(iv)(A)(5)(a) or (b).


 


7

















 


(B)           “Additional Stock” shall mean any
shares of Common Stock issued (or deemed to have been issued pursuant to
subsection 1(d)(iv)(A)(5)) by the Corporation on or after the Filing Date other
than:


 


1.     Shares of Common Stock issued to employees, directors,
officers, consultants and other service providers for the primary purpose of
soliciting or retaining their services pursuant to plans or agreements approved
by this corporation’s Board of Directors;


 


2.     Common Stock issued pursuant to the conversion or
exercise of convertible or exercisable securities outstanding on the Filing
Date;


 


3.     Common Stock or other securities convertible into
shares of Common Stock that are issued with the approval of the holders of not
less than a majority of the then-outstanding shares of Series B-1
Preferred Stock and a majority of the then-outstanding shares of Series B-2
Preferred Stock; and


 


4.     Common Stock issued pursuant to the conversion of the Series B
Preferred Stock.


 


(v)           In the event the Corporation should at
any time or from time to time after the Filing Date fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common
Stock or the determination of holders of Common Stock entitled to receive a
dividend or other distribution payable in additional shares of Common Stock or
other securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as “Common Stock Equivalents”) without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the Conversion Price of the Series B Preferred Stock shall be
appropriately decreased so that the number of shares of Common Stock issuable
on conversion of each share of such series shall be increased in proportion to
such increase of the aggregate of shares of Common Stock outstanding and those
issuable with respect to such Common Stock Equivalents.


 


If the number of shares of
Common Stock outstanding at any time after the Filing Date is decreased by a
combination of the outstanding shares of Common Stock, then, following the
record date of such combination, the Conversion Price for the Series B
Preferred Stock shall be appropriately increased so that the number of shares
of Common Stock issuable on conversion of each share of such series shall be
decreased in proportion to such decrease in outstanding shares.


 


(vi)          Reservation of Common Stock. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock that number of shares
of Common Stock as shall from time to time be sufficient to effect the full
conversion of all outstanding shares of Series B Preferred Stock.


 


(e)           Election and Removal of Directors by Series B
Preferred Stock.  Subject to Section 1(f)(ii), the holders
of record of the shares of Series B Preferred Stock, exclusively, shall be
entitled to nominate and elect one (1) director of the Corporation (the “Series B
Director”).  At each regularly
scheduled meeting of the Corporation’s stockholders which is 


 


8

















 


called for the purpose of electing members of the
Board of Directors, the presence in person or by proxy of the holders of a
majority of the shares of Series B Preferred Stock then outstanding shall
constitute a quorum of the Series B Preferred Stock for the purpose of
electing the director by holders of the Series B Preferred Stock.  A vacancy in said directorship filled by the
holders of Series B Preferred Stock shall be filled only by vote or written
consent in lieu of a meeting of the holders of the Series B Preferred
Stock.  The Series B Director may be
removed, with our without cause, by the holders of Series B Preferred
Stock in the same manner as such director may be elected hereunder.


 


(f)            Voting Rights.


 


(i)            Except as otherwise expressly provided
herein or as required by law, the holders of Series B Preferred Stock
shall be entitled to vote on all matters upon which holders of Common Stock
have the right to vote and, with respect to such right to vote, shall be
entitled to notice of any stockholders’ meeting in accordance with the
Corporation’s Bylaws, and shall be entitled to a number of votes equal to the
number of shares of Common Stock into which such shares of Series B
Preferred Stock could then be converted, at the record date for the
determination of stockholders entitled to vote on such matters or, if no such
record date is established, at the date such vote is taken or any written
consent of stockholders is solicited. Except as otherwise expressly provided
herein, or to the extent class or series voting is otherwise required by law or
agreement, the holders of Series B Preferred Stock or Common Stock shall
vote together as a single class and not as separate classes.


 


(ii)           So long as at least 125,000 shares of Series B
Preferred Stock remain outstanding, the Corporation shall not, without first
obtaining the approval (by vote or written consent, as provided by law) of not
less than a majority of the then-outstanding shares of the Series B
Preferred Stock, as determined on a fully diluted and as-converted basis:


 


(A)          Amend the Corporation’s Certificate of
Incorporation or Bylaws in any material respect (other than an amendment to
change the name of the Corporation);


 


(B)           Declare or pay any dividend or other
distribution upon the Corporation’s capital stock (except dividends payable
solely in shares of Common Stock or Series B or Series C Preferred
Stock in lieu of payment of cash dividends), or purchase, redeem, or otherwise
acquire any shares of the Corporation’s capital stock, except for repurchases,
at cost, of shares of the capital stock of the Corporation (pursuant to rights
held by the Corporation as of the Filing Date) held by the Corporation’s
consultants, directors, officers or employees;


 


(C)           Sell, lease, assign, transfer or
otherwise convey or otherwise dispose of all or substantially all of the assets
of the Corporation or any of its subsidiaries, or effect any consolidation,
merger or reorganization involving the Corporation or any of its subsidiaries,
or effect any transaction or series of related transactions in which the
Corporation’s stockholders immediately prior to such transaction or
transactions own immediately after such transaction or transactions less than
50% of the voting securities of the surviving corporation or entity (or its
parent);


 


9

















 


(D)          Reclassify, reorganize or recapitalize
the Corporation’s outstanding capital stock;


 


(E)           Create or issue any class or series of stock
or other security of the Corporation on parity with or having preference over
the Series B Preferred Stock or increase the authorized number of shares
of the Series B Preferred Stock;


 


(F)           Effect any transaction with the
management, related parties or other affiliates of the Corporation, or extend
or waive the terms of any such existing transactions, other than (1) issuances
of options, warrants or Common Stock pursuant to an equity incentive plan or
similar arrangement approved by the Board of Directors or (2) any other
transaction with management, related parties or affiliates of the Corporation
on terms approved by a majority of the members of the Board of Directors who
are not, either directly or indirectly, a party to such transaction; and


 


(G)           Increase or decrease the number of
directors on the Board of Directors of the Corporation.


 


(g)           Financial Statements, Reports, etc. 
The Corporation shall furnish to each to each holder of the Series B
Preferred Stock:


 


(i)            within 90 days after the end of each
fiscal year, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition of the
Corporation and its consolidated subsidiaries as of the close of such fiscal
year and the results of its operations and the operations of such persons
during such year, together with comparative figures for the immediately
preceding fiscal year, all in reasonable detail and prepared in accordance with
United States generally accepted accounting principles (“GAAP”), all
audited by UHY, LLP or other independent public accountants of recognized
national standing and accompanied by an opinion of such accountants (which
opinion shall be without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements fairly present
the financial condition and results of operations of the Corporation and its
consolidated subsidiaries on a consolidated basis in accordance with GAAP;


 


(ii)           within 45 days after the end of each
of the first three fiscal quarters of each fiscal year, its consolidated
balance sheet and related statements of income, stockholders’ equity and cash
flows showing the financial condition of the Corporation and its consolidated
subsidiaries as of the close of such fiscal quarter and the results of its
operations and the operations of such persons during such fiscal quarter and
the then elapsed portion of the fiscal year, and comparative figures for the
same periods in the immediately preceding fiscal year, all certified by one of
its chief executive officer, chief financial officer, any vice president,
principal accounting officer, treasurer, assistant treasurer or controller of
such person as fairly presenting in all material respects the financial condition
and results of operations of the Corporation and its consolidated subsidiaries
on a consolidated basis in accordance with GAAP, subject to normal year-end
audit adjustments and the absence of footnotes.


 


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(h)           Preemptive Rights. If the Corporation authorizes the
issuance and sale of Additional Stock (as defined in Section 1(d)(iv)(B))
other than pursuant to an underwritten public offering registered under the
Securities Act or for non-cash consideration pursuant to a merger or
consolidation approved by the Board of Directors of the Corporation, the
Corporation shall first offer in writing to sell to each holder of Series B
Preferred Stock a portion of the securities being issued equal to the quotient
obtained by dividing (A) the aggregate number of shares of Series B
Preferred Stock then owned by such holder by (B) the aggregate number of
shares of Series B Preferred Stock then outstanding. If all offered
securities are not subscribed to by such holder of Series B Preferred
Stock in writing delivered to the Corporation within twenty days after the date
of delivery of the Corporation’s original notice to such holder, then the
Corporation shall offer all of such securities for sale to those other holders
of Series B Preferred Stock that did elect to subscribe for such
securities.  If such offer is
oversubscribed by such Series B Preferred Stock holders then the
Corporation shall offer such securities to such Series B Preferred
Stockholders pro rata on the basis of the number of securities previously
subscribed to by such holders pursuant to the formula above.  If the holders of Series B Preferred
Stock do not elect to subscribe for all of such securities in writing delivered
to the Corporation within twenty days after the date of delivery of the
Corporation’s second notice then the Corporation shall be free to offer such
securities to any other person or persons at a price and on terms determined by
the Corporation, provided that such price and terms are no more favorable to
such person or persons than the price and terms on which such securities were
offered to the holders of Series B Preferred Stock. Any securities not
sold by the Corporation within 90 days after the date of the Corporation’s
initial notice to the holders of Series B Preferred Stock hereunder shall
then become subject again to the provisions of this Section 1(h).


 


[SIGNATURES ON FOLLOWING PAGE]


 


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IN WITNESS WHEREOF,
Geokinetics Inc. has caused this Third Amended Certificate of Designation to
its Certificate of Incorporation to be signed by Richard F. Miles, its
President and Chief Executive Officer, this 18th day of
December, 2009.


 


 


	
   

  	
  GEOKINETICS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard F. Miles

  
	
   

  	
   

  	
  Richard F. Miles,
  President and

  
	
   

  	
   

  	
  Chief Executive Officer

  



 


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